Mortgage rates declined slightly last week, but are still more than two percentage points higher than a year ago.

Price data released last week showed persistent inflation in many areas of the economy, but interest rates did not move higher on this news as the Federal Reserve affirmed market expectations for 50-basis-point rate hikes at the next two meetings of the Federal Open Market Committee. With continued market volatility, investors appeared to shift to a “risk off” mode, with equity prices declining and U.S. Treasury yields moving lower. Investors are questioning how hawkish the Federal Reserve can be with recent market volatility and the potential for slow growth or a recession resulting from rate increases. Economic data releases are light this week, but retail sales figures yesterday did show signs of continued momentum in consumer spending.

This reading may put upward pressure on rates in the coming week, showing a resilient level of consumer demand that may keep the economy growing even with higher interest rates.